Inclusive Business Practices for Small and Medium Sized Enterprises:
Addressing Barriers and Building Capacity
Over the past several decades, the quality of work in Canada has declined with increasing numbers of workers employed in precarious working conditions. Precarious work is work that is typically low-wage and non-permanent or part-time. Precarious work has important social impacts including the reduced health and well-being of workers, their families and communities which results in increased public costs for associated health and social services.
While precarious employment poses important costs on families and communities, businesses also have enormous potential to contribute to social progress through their normal business operations. This is sometimes called an “inclusive growth” or “shared value” approach to business. Inclusive business practices include paying a living wage, providing stable employment, offering training and advancement opportunities, flexible employment practices, hiring and managing for equity and diversity, leveraging supply chains, and bottom of the pyramid approaches to product and service development.
Research has shown that companies that adopt inclusive practices do better in the long run. The business benefits of inclusive practices include greater productivity and profitability, a more stable labour force and supply chain, enhanced reputation, greater innovation and greater customer / brand loyalty. Despite the advantages accruing to inclusive practices, many businesses fail to adopt them. This may be due to a lack of awareness of inclusive practices and their benefits. It may also be due to important barriers faced by businesses that inhibit adoption. Some key barriers include:
· Lack of clarity about a company’s business and social objectives.
· Lack of commitment by corporate leadership.
· The culture of the organization and the degree to which it embraces risk or innovation.
· The capacity and requisite skills and knowledge to adapt processes and implement innovative practices.
· The time horizon within which to generate returns and demonstrate profitability.
· The ability to generate sufficient cash flow during the initial adoption phase.
· Access to capital to support innovation.
While these challenges are faced by many organizations, they are particularly acute for Small and Medium Sized Enterprises (SMEs). Many of the innovative practices in inclusive business have been led by large firms with the ability to develop capacity and absorb risk. There has been little exploration of strategies appropriate for SMEs that respond to the unique constraints that they operate within. Understanding those constraints and exploring best practices in addressing them may be an important step forward in creating the conditions for decent work and inclusive growth throughout the Canadian economy. To address this knowledge gap, this research project aims to:
This proposal seeks funding to conduct research that examines the constraints to the adoption of inclusive business practices by Small and Medium Sized Enterprises and best practices in overcoming those barriers.
a) Assess the level of awareness of inclusive business practices by Small and Medium Sized Enterprises.
b) Identify critical barriers to the adoption of inclusive business practices by Small and Medium Sized Enterprises.
c) Identify best practices in addressing the barriers to practice adoption by Small and Medium Sized Enterprises.
d) Develop a knowledge mobilization strategy and appropriate knowledge products and services that can increase awareness of best practices and increase the adoption of inclusive practices.
For more information about this project please contact Rudo Makoni at Rudo.Makoni@ambrose.edu.
This project is funded by a generous grant from Coast Capital Savings.